Deal to renovate KeyArena the culmination of a long political battle

Originally published December 5, 2017 at 6:02 pm
Updated December 5, 2017 at 6:57 pm

The Los Angeles-based Oak View Group plans to renovate KeyArena by October 2020 at a cost of $600 million. (Mike Siegel/The Seattle Times)

The exhausting, at times tumultuous process to renovate KeyArena didn’t start in May 2016 when a rival project for the city’s Sodo District was rejected by the city council. The roots date to 2013, when some began exploring whether a KeyArena renovation was possible.

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With Seattle Mayor Jenny Durkan planning Wednesday to green-light a $600 million renovation of KeyArena, a long-fought battle to approve a major sports arena plan for NBA and NHL use appears to finally be concluding.

The exhausting, at times tumultuous process to renovate a 55-year-old facility didn’t start in May 2016 when a rival project pitched by entrepreneur Chris Han­sen for the city’s Sodo District was rejected by the city council. Rather, the roots date to 2013, when Anschutz Entertainment Group (AEG) quietly began exploring whether a KeyArena renovation was possible.

And the battle to convince people it could be done was an arduous affair, culminating with the city council voting 7-1 on Monday to approve a Memorandum of Understanding (MOU) with the Tim Leiweke-led Oak View Group to undertake the renovation and bring NBA and NHL teams here.

Council members and other city proponents of renovating KeyArena have been accused by some Sodo supporters of being in the pockets of big business, the Port of Seattle and other entities.

“Since we took a vote in May of 2016, it’s been a long road, particularly for my female colleagues,” council member Debora Juarez said Monday. “The irony here today is that the women — and just a couple of men, my colleagues — put in the hard work to get this done.”

She added: “I think some people thought that because that happened, that somehow some of us would be punitive and vindictive. But in fact … that just made us more emboldened to do the right thing and do our homework.”

And what they learned about KeyArena, its renovation potential and the money companies would spend on it, differed greatly from what the public narrative had been.

Indeed, the backlash against the council members was inspired partly by fan frustration and ignorance. Some fans had been led to believe — by oft-repeated notions about KeyArena’s renovation potential — that a Sodo arena had been the city’s last hope to lure the NBA back.

In reality, even had the May 2016 vote passed, there was no sign Hansen’s arena would be built. NBA commissioner Adam Silver had warned then-Mayor Ed Murray that his league was not expanding for years and told The Seattle Times two weeks before the Sodo vote that Hansen having a “shovel ready” arena plan wouldn’t matter.

Behind the scenes, city-council members wondered why they had to vote on anything until Hansen showed he could get a team. Also, they wondered why they were voting on a new arena plan when they had learned in 2015 it might be possible to renovate KeyArena.

In the summer of 2014, council member Jean Godden led a push to explore alternative uses for KeyArena in the event a Sodo arena got built. The council knew city-owned KeyArena was in dire need of renovation and that a new Sodo arena would lure concerts away from it.

Enter the AECOM architectural firm, hired by Godden and the council in mid-2014 to figure out how to prevent KeyArena from becoming an albatross.

AEG by then had begun letting folks know about its internal KeyArena viability studies. And by the summer of 2014, then-city-council-member Nick Licata said he was aware that a KeyArena remodel might be possible without damaging its roof.

A handful of council members, prime among them Tim Burgess, decided to find out. By fall of 2014, pushed by Burgess and others, the AECOM study on alternative KeyArena uses was expanded to determine whether an NBA/NHL remodel could be done.

By November 2014, AECOM had determined that it could. Word of the finding trickled through city hall.

But by March 2015, there was a problem. A final environmental-impact statement (EIS) on the Sodo arena was to be released in May by URS Corp., a company that had just been bought by AECOM.

URS had been required to study alternative Sodo arena sites and was prepared to dismiss KeyArena as a nonviable NBA/NHL option, based on older studies. Meanwhile, its new parent company, AECOM, had just determined the opposite with its own study due to be released around the same time.

Public records show officials from both companies debated what to do. City-council staffers got involved and ultimately, the planned May 2015 release of the AECOM report was delayed nearly two months by the council. The Sodo arena final EIS was released on schedule on May 7, 2015 with the unchanged conclusion that a KeyArena renovation wasn’t possible.

The decision to delay one report and publish another with contradictory information helped further mislead sports fans into thinking the Sodo arena was the only avenue to getting the NBA back.

But by mid-summer 2015, the AECOM report was quietly released internally to the city council and other city officials who shared it with select members of the public. Records show that Victor Coleman, head of Hudson Pacific Properties, was given a copy and met with AEG president Newman and city staffers to discuss a potential KeyArena renovation.

Coleman wanted an NHL team and had tried to partner with Hansen to have one play at the Sodo arena. But nothing materialized.

Still, Hansen’s five-year MOU with the city gave him exclusivity over KeyArena, which was to be used as a temporary NBA site while his Sodo arena was being built. After seeking legal advice, Murray concluded the city couldn’t talk Key­Arena with Coleman or anyone while Hansen’s MOU remained in effect.

Coleman’s company was worth $8 billion. Despite this, the belief persisted locally that no major bidders would pay the KeyArena renovation tab.

At that point, AECOM was estimating a minimum renovation cost of $285 million.

By early 2016, with Murray trying to force a Sodo arena vote by the council, he ran into opposition.

A letter to Murray circulated by council member Mike O’Brien and approved by the majority of the council asked that a Sodo vote be put off until Hansen acquired an NBA team. Murray fought back and eventually pressured the council to schedule it anyway.

Murray just wanted to see the process through. Like many of the council members, Murray had doubts Hansen could land an NBA team but didn’t want to be accused of sabotaging the deal.

The May 2, 2016, vote went 5-4 against Hansen’s plan. It also fell along gender lines — five women opposing it and four men favoring — and fueled some of the misogynistic backlash that ensued.

With Hansen’s deal all but dead, Murray soon asked him to waive exclusivity over KeyArena so the city could take offers to renovate it. Hansen agreed and on Oct. 27, 2016, Murray announced he’d seek proposals by January 2017 to renovate KeyArena.

Both AEG and Coleman’s company jumped in, forming the Seattle Partners group. And Leiweke stepped forward with an OVG bid.

Not only would both pay the AECOM-estimated $285 million tab, but upon further exploration, they offered to spend double that amount in efforts to outbid one another.

The city ultimately picked the OVG proposal and waited for Hansen’s prior MOU to expire Sunday. And on Monday, a new MOU at KeyArena took hold.

Now, the myths dispelled and the council votes counted, OVG has a deal both leagues are aware of. It wasn’t the plan, or location, initially envisioned five years ago. But the city now hopes that arena politics might soon be replaced by actual sports.

“We think that the new arena design will certainly be ready for NBA and NHL teams,” council president Bruce Harrell said. “It’s not contingent upon them. But it certainly puts us in the driver’s seat, I think, to attract that kind of activity.”